Africa’s largest mobile network operator is set to become the sole owner of one of the continent’s biggest tower companies after IHS Towers’ board gave the green light to a takeover offer from MTN Group.
The South African telecoms giant has put an offer of US$8.50 per share on the table, a price that would see it buy out all remaining shareholders and take IHS private following its delisting from the New York Stock Exchange. The deal values the shares MTN does not already own at roughly US$2.2 billion.
MTN currently holds around 24.7% of IHS, which operates close to 29,000 towers across five African markets where MTN itself is active. The planned acquisition would hand MTN full ownership of that infrastructure, ending an arrangement under which it has been paying IHS for access to towers it once controlled directly.
The financial logic is straightforward: by bringing the tower business back in-house, MTN expects to absorb margins it currently pays out to IHS, capture a share of revenues from third-party network operators using the same infrastructure, and gain greater predictability over its costs.
MTN Group President and CEO Ralph Mupita said: “This proposed transaction is a pivotal step in further strengthening MTN Group’s strategic and financial position for a future where digital infrastructure will become ever more essential to Africa’s growth and development. This transaction gives us a unique opportunity to buy back our towers and strengthen our ability to be partners for progress to the nation states in which we operate.”
He added: “For IHS customers and partners across the continent, we commit to continuing high standards of service and the right governance of what is the largest standalone and integrated tower company in Africa, enabled by the excellent people within IHS.”
IHS Chairman and CEO Sam Dawish said: “The proposed transaction deepens our long-standing partnership with MTN as it combines Africa’s largest mobile network operator with one of its largest digital infrastructure platforms and underscores the strong connection between IHS Towers and the African continent.”
Funding will be split between roughly US$1.1 billion sitting on IHS’s balance sheet and a combination of MTN’s available liquidity and new debt. No new MTN equity will be issued. The company says the transaction is expected to add to both net income and cash flow, though leverage will rise in the short term.
The offer is a 9.7% premium over IHS’s 30-day volume-weighted average share price as of February 4, the final trading day before MTN flagged the talks publicly. Long-term IHS investor Wendel has already indicated it will vote in favour of the deal, and combined with MTN’s own voting rights, around 40% of the required two-thirds shareholder approval has effectively been locked in.
The acquisition will only proceed once IHS completes the sale of its Latin American assets, transactions announced on February 11 and February 17, leaving its African tower portfolio as the sole remaining business. Regulatory sign-off across the relevant markets will also be required before the deal can close.